The Contracting Education Academyhttp://contractingacademy.gatech.edu
Thu, 17 Aug 2017 05:56:24 +0000en-UShourly1https://wordpress.org/?v=4.7.5Why are local governments using a Russian software the feds won’t?http://contractingacademy.gatech.edu/2017/08/17/why-are-local-governments-using-a-russian-software-the-feds-wont/
http://contractingacademy.gatech.edu/2017/08/17/why-are-local-governments-using-a-russian-software-the-feds-wont/#respondThu, 17 Aug 2017 05:56:24 +0000http://contractingacademy.gatech.edu/?p=11350The Washington Postrevealed on July 23rd that several local governments across the U.S. are using a Russian brand of security software that the federal government fears could be leveraged by the foreign country for cyberespionage.

In July, the federal government removed Kaspersky Lab, a Moscow-based company that sells anti-virus security software, from its list of approved vendors. Meanwhile, nearly all the local governments interviewed by the Post appeared unaware of the controversy. Upon learning about it, most said that they had no immediate plans to stop using the product.

The news is merely the latest development in an ongoing debate about whether local governments are doing enough to protect themselves from cyber threats.

Cybersecurity experts have long been sounding the alarm about local governments’ vulnerability to cyberattacks and the impact such an intrusion could have. They say most local governments face great barriers to protecting their data and systems, including lack of funding, shortage of cybersecurity professionals and general ignorance about the seriousness of the threat.

]]>http://contractingacademy.gatech.edu/2017/08/17/why-are-local-governments-using-a-russian-software-the-feds-wont/feed/0Senate attempt to reduce protests misses the pointhttp://contractingacademy.gatech.edu/2017/08/16/senate-attempt-to-reduce-protests-misses-the-point/
http://contractingacademy.gatech.edu/2017/08/16/senate-attempt-to-reduce-protests-misses-the-point/#respondWed, 16 Aug 2017 05:51:11 +0000http://contractingacademy.gatech.edu/?p=11346When it comes to federal procurement, the frequency and expectation of protests has had a palpable, costly, and sometimes deleterious effect on the process and those competing in it.

Most companies now add an extra six to 12 months to their revenue projections in order to account for possible protests.

There is good reason to believe (including surveys) that “low price/technically acceptable” (LPTA) procurement strategies are, with some frequency, driven by a desire to avoid protests, since protesting such procurements is near impossible.

And, of course, there have been cases where incumbents, having lost a re-competition, submit a protest and, as a result, effectively get a contract extension while the protest is decided.

All of these represent unintended and undesirable impacts of the protest process. As a result, many have believed for some time that significant remedial action is needed. This includes the Senate Armed Services Committee, which, for the second year in a row, has included provisions in the defense authorization bill that would require losing protestors to reimburse the government for the costs of a protest when none of the plaintiff’s allegations are sustained.

]]>http://contractingacademy.gatech.edu/2017/08/16/senate-attempt-to-reduce-protests-misses-the-point/feed/0Agencies can deliver better results for less money by using outcome-based contracting modelhttp://contractingacademy.gatech.edu/2017/08/15/agencies-can-deliver-better-results-for-less-money-by-using-outcome-based-contracting-model/
http://contractingacademy.gatech.edu/2017/08/15/agencies-can-deliver-better-results-for-less-money-by-using-outcome-based-contracting-model/#respondTue, 15 Aug 2017 05:43:40 +0000http://contractingacademy.gatech.edu/?p=11342As the Trump administration continues to set its agenda for the federal government, it is emphasizing accountability, efficiency and tangible results. The message is clear: agencies must deliver better results with fewer resources.

With budget cuts, hiring freezes and greater scrutiny of program funding, we need a fundamental shift in the way agencies acquire services and deliver on their missions to citizens. Outcomes-based contracting, which promotes a tight collaboration between agencies and their contractors, is a natural fit for this environment. With the administration’s business-centric approach to problem-solving, it would make sense for agencies to tie contractors’ compensation to their ability to deliver defined program outcomes.

The Opportunity

In an outcomes-based contracting model, companies are paid for the results they deliver. It’s an approach that has already gained popularity within the technology industry, so much so that Gartner predicts that by 2018, one-third of all IT contracts will be based on program outcomes, replacing traditional cost-plus contracts that pay based on the completion of individual tasks or activities.

Outcomes-based contracting has enormous potential beyond IT procurements. Amid growing skepticism about the effective implementation of both large and small public programs, outcomes-based contracts help to ensure that agencies are good stewards of taxpayer funds by directly aligning contractor compensation with program goals.

]]>http://contractingacademy.gatech.edu/2017/08/15/agencies-can-deliver-better-results-for-less-money-by-using-outcome-based-contracting-model/feed/0Singapore executives sentenced for fraud in international Navy corruption scandalhttp://contractingacademy.gatech.edu/2017/08/14/singapore-executives-sentenced-for-fraud-in-international-navy-corruption-scandal/
http://contractingacademy.gatech.edu/2017/08/14/singapore-executives-sentenced-for-fraud-in-international-navy-corruption-scandal/#respondMon, 14 Aug 2017 05:44:23 +0000http://contractingacademy.gatech.edu/?p=11384Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced on August 12, 2107 for conspiring to submit bogus claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the U.S. Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.

The case is the latest in a series of convictions spanning more than two years and involving Leonard Glenn Francis, the former CEO of GDMA, a defense contracting firm based in Singapore. Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (See The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

In the latest conviction, Neil Peterson, 39, and Linda Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis L. Sammartino of the Southern District of California. Both worked as chief deputies for GDMA, which was owned by “Fat Leonard” Francis. Peterson served as the vice president for global operations for GDMA and Raja served as GDMA’s general manager for Singapore, Australia and the Pacific Isles.

Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. They each pleaded guilty in May 2017 to one count of conspiracy to defraud the United States with respect to claims.

According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the U.S. Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required, they admitted.

Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide port authorities.

For example, Peterson and Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA’s core management team, false documents and inflated invoices were presented to the U.S. Navy. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted.

Peterson and Raja admitted that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.

So far, 17 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

The DCIS, NCIS and the Defense Contract Audit Agency are continuing to investigate.

The bill would fully fund the defense budget request for cyber operations and provide resources for cyber warfare. The funding would go toward the HASC’s recommendations outlined in 13 issues of the report’s Cyber-Related Matters section.

If the bill is passed, the following issues could effect defense IT contractors in fiscal 2018, due either to requirement changes or to potential opportunities resulting from the fully funded and potential increases in cybersecurity operations.

Now, lawmakers are beginning to turn their attention to some of the more nitty-gritty challenges facing the Veterans Affairs Department.

VA, however, doesn’t see the need for new legislative fixes, or at least, not these particular suggestions related to the department’s training and onboarding for acquisition professionals, as well as its procurement reporting standards.

But Congress, long frustrated by VA’s lengthy contracting processes and the scheduling and cost overruns it’s seen with major construction projects in the past, isn’t convinced the department can more effectively manage the procurement process and staff its offices properly without new legislation.

]]>http://contractingacademy.gatech.edu/2017/08/10/congress-turning-its-attention-to-acquisition-training-challenges-at-va/feed/0Panel urges acquisition system reformhttp://contractingacademy.gatech.edu/2017/08/09/panel-urges-acquisition-system-reform/
http://contractingacademy.gatech.edu/2017/08/09/panel-urges-acquisition-system-reform/#respondWed, 09 Aug 2017 05:42:39 +0000http://contractingacademy.gatech.edu/?p=11325The 2016 National Defense Authorization Act (NDAA) established the Section 809 Panel to address fundamental problems with how the Defense Department acquires goods and services to support its warfighters.Starting in 2008, whenever new legislation or regulation debuted that affected government contracting, it was written on a band-aid and stuck to a golf ball.

It recently released an interim report and supplement advocating in broad strokes for a host of improvements to the acquisition system to better streamline the process and increase industry offerings to the government.

In meeting with over 200 government and industry representatives, the interim report found that the acquisition system creates obstacles that make it unattractive for small and large businesses alike to offer their goods and services to the government. It explained that “the United States’ ability to maintain technological, military and economic superiority is being challenged,” as our adversaries are recognizing vulnerabilities in our forces and the ability to respond through modernization.

Thus, the Pentagon’s acquisition procedures must be improved to achieve “a degree of agility that DoD is not currently able to deliver,” it said.

To achieve this agility, the interim report recommended several improvements.

The Department of Energy’s Federal Energy Management Program [FEMP] recently awarded 21 indefinite delivery/indefinite quantity contracts to energy service companies [ESCOs] to help the government increase energy savings and lower operating costs.

“The core scope of work that these contracts cover are energy efficiency improvements, the types of things that we can do in these contracts are quite wide and varied,” said Timothy Unruh, deputy assistant secretary of renewable power within the department’s energy efficiency office. “They can include efficiency improvements that may be a boiler plant improvement, a chiller plant improvement. It can include equipment to the air-moving equipment within the building, it can have changes in lighting, the building’s electronic control system can also be updated. The building envelope: windows, doors, installations and so forth, can also be included in these contacts.”

The contracts also include renewable energy sources for combined heat and power, such as solar panel installations, or wind-farm installations.

Federal real property is getting greener, one lighting fixture, window treatment and HVAC system at a time. The Department of Energy’s Federal Energy Management Program [FEMP] recently awarded 21 indefinite delivery/indefinite quantity contracts to energy service companies [ESCOs] to help the government increase energy savings and lower operating costs. “The core scope of work that these contracts cover are energy efficiency improvements, the types of things that we can do in these contracts are quite wide and varied,” said Timothy Unruh, deputy assistant secretary of renewable power within the department’s energy efficiency office. “They can include efficiency improvements that may be a boiler plant improvement, a chiller plant improvement. It can include equipment to the air-moving equipment within the building, it can have changes in lighting, the building’s electronic control system can also be updated. The building envelope: windows, doors, installations and so forth, can also be included in these contacts.” The contracts also include renewable energy sources for combined heat and power, such as solar panel installations, or wind-farm installations.

Recent data indicates that protests have increased overall by approximately 17 percent since 2012, exceeded only by the decrease in government contract spending over that same time.

The resulting increase in pre-award costs derived from protests for all parties concerned requires a step back to analyze what is driving this not-so-encouraging trend, and what, if anything, should be done about it.

Most involved in government contracting today understand the recent trends of a declining overall market. Topping out at almost $600 billion a few years ago, the current federal budget has been squeezed by such things as the Budget Control Act of 2011, automatic budget sequestration, mandatory cuts, spending caps, and overall drawdown of U.S. military operations worldwide. Contractors are now competing for ever fewer dollars, as the government’s “mandatory” spending — in areas such as healthcare and retirement — continues to shrink the “discretionary” dollars available for everything else. This has resulted in many contractors leaving the federal market, either through mergers or simply going out of business, or diversifying into other business lines.

]]>http://contractingacademy.gatech.edu/2017/08/07/contract-protests-up-contract-awards-down-what-to-do/feed/0Could ‘microconsulting’ disrupt government contracting?http://contractingacademy.gatech.edu/2017/08/04/could-microconsulting-disrupt-government-contracting/
http://contractingacademy.gatech.edu/2017/08/04/could-microconsulting-disrupt-government-contracting/#respondFri, 04 Aug 2017 05:21:48 +0000http://contractingacademy.gatech.edu/?p=11295I have never been a fan of contractor bashing.

I believe there is nothing wrong with making a profit. I do not believe that contractors typically spend their days dreaming up ways to cheat the government. Indeed, I even believe that many contractor employees and managers believe deeply in the missions of organizations they work for, and get satisfaction from helping citizens and society through their organizations’ efforts — an observation I discussed a while back in a blog based on an informal conversation at a Coalition for Government Procurement event.

Having said that, I was a strong advocate even when in government 20 years ago for bringing more suppliers who primarily sold to the commercial marketplace into government contracting. Indeed, at a strategic level one of the main thrusts of the procurement reform efforts of the 1990s was to reduce barriers to entry for commercial firms created by government procurement rules — both in terms of the complexity of the process and some government oversight requirements that were burdensome or expensive for contractors to comply with.